Consumer-driven health plans grow slowly

Analysts say people still do not fully understand the high-deductible plans.

By Pamela Lewis Dolan — Posted April 16, 2007

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More employers are offering consumer-driven health plans, but employees have been slow to embrace them, according to a recently released study.

Watson Wyatt Worldwide and the National Business Group on Health recently released its annual health plan survey which found 38% of employers were offering CDHPs, but enrollment in those plans is only 8%, just one percentage point more than a year ago.

CDHP is a catch-all term that refers to plans such as health savings accounts, or any other insurance plan that requires consumers to take a more active role in managing their own health costs.

Because enrollment in CDHPs has been low, some companies have offered employees financial incentives for enrolling.

The survey found the companies with the highest percentage of enrollees were 17% more likely to offer incentives. Five percent of large employers are offering CDHPs as the only health plan option.

"Most [CDHPs] have high deductibles, and no one who has an alternative is necessarily going to choose a high deductible if they already have a low deductible," said Helen Darling, who is president of the National Business Group on Health, an employers' consortium.

And the fact that most consumer-driven health plans are associated with health savings accounts has not helped, she said. Health savings accounts allow consumers to put aside, tax-free, money toward their health care costs.

"We know employees like things simple and they don't like change. Many aren't willing to make any effort to learn," Darling said.

American Medical Association policy states that efforts to educate patients on the advantages of HSAs must be enhanced.

Bill Howard, executive vice president of marketing for Fiserv Health, which administers self-funded plans for large employers as a subsidiary of Fiserv, a Fortune 500 banking technology company, said the study is indicative of the infancy of CDHPs and HSAs.

Howard said he expects as more employers become educated about how HSAs work they will be better equipped to communicate the advantages to employees. Many employers were slow to understand HSAs because they expected to have more control over the accounts, he said.

Howard also said more tools are needed to give employees an accurate cost analysis of a high-deductible plan versus one with a high premium.

Mohit Ghose, spokesman for America's Health Insurance Plans, a trade group for the largest insurers, said the organization views HSA-compatible plans "an integral part of the suite of products" but doesn't see the survey results as a good or bad thing. "We need to have more choices, not less, so people can find the coverage that works best for them," Ghose said.

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